Rosetta Stone Acquires Online Language Service Livemocha

Rosetta Stone (RST) said on Tuesday it purchased Seattle-based Livemocha, an online language-learning rival, for $8.5 million in cash.

The deal, which closed on Monday, gives Rosetta Stone a larger footprint in cloud-based services, as consumers move away from traditional software like the discs Rosetta Stone is known for selling.

Livemocha also gives the company a cheaper alternative to its current offerings, which can cost more than $350. Livemocha offers free courses and premium services, such as private tutoring, and utilizes a community of over 16 million language experts, instructors and multi-linguists, according to Virginia-based Rosetta Stone.

“We are in the process of transforming Rosetta Stone to be the most dynamic and ubiquitous technology-based learning platform in the world. Our acquisition of Livemocha will help accelerate that transformation,” Rosetta Stone President and CEO Steve Swad said.

West Stringfellow, Rosetta Stone’s chief product officer, said Livemocha will enable the company to migrate legacy products to cloud-based distribution, while also adding a low-cost or free alternative product.

Rosetta Stone added in its announcement that Livemocha’s headquarters in Seattle and development offices in Austin, Texas, and San Francisco expands the company’s footprint and will help it attract talent to develop new products.

Shares of Rosetta Stone were up 40 cents at $15.46 Tuesday morning. The stock is up more than 22% this year.